16th Nov 1999 Ramkumar D @gto.net.om
VLS Finance made tall promises and collected huge premium ( highest for any listed finance company or any other listed company in India) in their public issue of shares few years back. Can some body explain why the shares are quoting at such a low price if I remember right, issue price was above Rs 600/- and current market price is around Rs15/-. Whether all the money raised by way public issue was utilised properly or it was siphoned off by the promoters. There are many companies like this and their directors assets have to be investigated by the concerned authorities and details should be made public. This will help gullibile investors who have invested their money and waiting for share prices to go up. Atleast invetors will get the real picture, if not they recover their money. PS: Mr. Sathyamurthy I do not know whether you are just an employee or a promoter of VLS Finance. I am in no way connected with khel.com. Thanks D Ramkumar
17th Nov 1999 VLS Chennai @md3.vsnl.net.in
Dear Ramkumar: I am glad that you raised this query and I am very happy to answer you. 1. I am not a promoter of VLS Finance, but a senior executive who has been with this company from almost the very inception. 2. The issue price was not Rs.600 but Rs.400 3. The current price is Rs.28 after a bonus of 1:1 given last year , which effectively means a price of Rs.56. 4. The Company has no debt. Only the equity funds. Which is very different when compared to most other finance companies which have had high cost operations because of aggressive branch openings and fixed deposit collections at high rates besides high cost of such borrowings due to ad spends, brokerages and commissions. 5. There has been no diversion of funds at all in the Company. The Company is stuck with some NPAs as most other finance companies. But, a stringent decision of not doing any fresh loans and not going for borrowings has kept VLS in good stead. 6. Some of the private equity investments made by the Company have started paying as the market has revived. The investment portfolio was marked to market and all losses on account of difference between the purchase prices and the then current market prices (two years back) have been fully provided in the p & l account. 7. As the stock market has revived now, most of the stocks in the investment portfolio have gained also - the portfolio has more than doubled from the marked down value. 8. We stand in strong position with over Rs.120 crore of funds in our hands and would have a profitable run as before in the years to come. 9. The share price will automatically look upwards when people realise the value of the tough decisions that we had taken and strong position we are in. I do not know if you are an investor in our Company, in any case, this will help you to understand us better. Regards Sathya I have deliberately marked it to the full list since your query was also to the general list.